Harsh decision blames Oak Bluffs for breaking bid laws

In what it labeled a “pattern of disregard,” the office of the Massachusetts attorney general, in a sharply worded decision released Tuesday found that Oak Bluffs town officials violated competitive bidding laws and failed to follow their own bidding bylaws when hiring contractors for work on town buildings.

While stopping short of fines or sanctions, the attorney general’s bid protest unit said it will closely monitor the town’s procurement of goods and services for the next year, require detailed reports on purchasing, and conduct training for local officials on procurement laws.

The decision comes in response to a bid protest lodged by former selectman Kerry Scott, who disputed the decisions of town administrator Michael Dutton in contracting for work on town hall. Mr. Dutton serves as the town’s chief procurement officer. While investigating that protest, the office of the attorney general said it uncovered irregularities on other projects, including the renovation of the town’s old library, a sewer project, and highway department work.

“This protest has revealed a pattern of disregard and certain evidence of intentional avoidance of the public construction bidding laws,” wrote assistant attorney general Deborah Anderson, in a decision dated June 7. “Public officials overseeing procurement of construction and other services are responsible for the expenditure of millions of taxpayer dollars each year. For this reason, it is vital they understand the public procurement laws as well as the principles of transparency, open competition, and anti-favoritism they are intended to serve. It is also vital they adhere to the laws. In response to this protest, and to its credit, the town has acknowledged some of its mistakes.”

Mr. Dutton acknowledged the town was deficient in procurement and bidding rules, but said his intent was to save money, not avoid the law.

“Our practice, our habit, has been in existence for many decades, and now we know the way we’re doing it was wrong,” Mr. Dutton said. “There is absolutely no doubt in my mind we did as cost-effective a bidding process as we could. We got the lowest cost for the taxpayer, there’s no doubt about that. I don’t think we spent a dime more.”

Kathy Burton, chairman of the selectmen, said while not pleased the town violated bidding laws, she is glad the town will get training on how to comply.

“I look forward to the procurement training, not only for construction projects, but as it relates to any service provider,” Ms. Burton said. “That’s going to help us do the right thing. That’s what we want to do.”

Splitting decision

The decision said a central issue is whether town officials intentionally divided contracts into two or more procurements to evade bidding laws.

“The town procured electrical services from Powers Electric totaling $185,546 from September 2009 to April 21, 2011,” Ms. Anderson wrote in the decision. “That work was divided into 113 payments. While intent to split bids may be difficult to prove, this large sum of money paid to a single contractor, divided into over a hundred different payments, at the very least presents the strong circumstantial evidence and appearance of bid splitting.”

Ms. Henderson said the town’s method of contracting for construction services may be costly to taxpayers.

“This practice likely hindered the town’s ability to get the best price for these services, resulted in more frequent and smaller purchases, administrative inefficiency and diminished transparency and integrity in its procurement process, all contrary to the Inspector General’s guidance on procurement practices and the purpose behind the public construction and bidding laws.”

“There is some strong language,” Mr. Dutton said. “I wouldn’t expect anything else. It’s important to note that they were pleased we were up front and forthcoming with the information they asked for. We weren’t in the business of hiding anything.”

Letter of the law

Mr. Dutton also contends that the geographical isolation of Martha’s Vineyard, where there are few or no state certified contractors qualified for certain kinds of work on public projects, complicates efforts to adhere to the law. He said on some previous town projects, the only contractors who bid on large public projects were located off-Island. The cost of transporting and housing workers, as well as moving heavy equipment from the mainland, added considerable expense. He cited public projects in Tisbury and Chilmark contracted by Seaver Construction that have run into long delays, cost overruns, and disputes over the quality of work. Executives for the off-Island contractor concede they did not anticipate the difficulty of hiring and retaining state certified sub-contractors, or coordinating the arrival of construction materials to the sites.

“You can step back and try to place blame,” Mr. Dutton said, “but when you’re on an Island, trying to live up to the letter of the law is sometimes very difficult and can be quite costly.”